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Cash use is declining

The way that consumers in the UK pay for goods and services has changed in recent years. Many consumers are increasingly turning their backs on cash and are moving to digital payments. This trend appears to have been accelerated by the coronavirus pandemic.

But it’s still an essential payment method for many vulnerable people

People who can’t use digital methods are at risk of being left behind.

  • Lower-income households and people who don’t have or can’t use the internet are much more likely to depend on cash.
  • Cash use appears to have declined less in constituencies with higher deprivation during the pandemic.
  • Some retailers don’t take payments by card, and intermittent connections can also limit digital payments.

There are fears for the future of the cash system

By 2017, debit cards had overtaken cash as the main means of making payments.

Lower demand for cash has in turn reduced the financial incentives for providing cash infrastructure, notably automated teller machines (ATMs).

Between 2018 and 2019, the number of free-to-use (FTU) ATMs fell by 13%, while the number of pay-to-use (PTU) machines rose by 38%. This trend seems to have been more marked in more deprived areas.

ATMs provided 90% of all cash withdrawn in 2019, but people can also get hold of cash through bank, building society and Post Office branches or through cashback.

Some businesses appear to be less likely to accept cash. In one survey, a tenth of consumers reported occasions where businesses had refused to accept cash during the pandemic.

Measures to protect access to cash

The 2019 Access to Cash Review highlighted the need for different government bodies and regulatory authorities to work together to ensure continuing access to cash.

This prompted the Treasury to set up and chair the Joint Authorities Cash Strategy (JACS) group.

In the 2020 Spring Budget, the Chancellor said the Government would legislate to protect access to cash.

In April 2021, the Government accepted an amendment to the Financial Services Bill to allow consumers to withdraw cashback without having to make a purchase.

In July 2021 the Treasury published a consultation document on access to cash. The consultation closed on 23 September 2021.


Library briefings

Protecting access to cash, 13 October 2021

Statistics on access to cash, bank branches and ATMs, 12 October 2021

Bank branches: why are they closing and what is the impact?, 2 January 2020

Financial Services Act 2021, 7 May 2021

Committee reports

House of Commons Treasury Select Committee, Consumers’ access to financial services, 13 May 2019

House of Lords Select Committee on the Rural Economy, Time for a Strategy for the Rural Economy, 27 April 2019 [section on Access to Finance]

House of Commons Scottish Affairs Select Committee, Access to Financial Services inquiry, 2017-19

Further reading

The Access to Cash Review – final report, March 2019

Community Access to Cash Pilots

Access to Cash consultation, HM Treasury, 1 July 2021

Access to Cash: Call for Evidence and Summary of Responses, HMT, 15 October 2020

Business: Money, House of Lords Written Answer, 27 September 2021

Cash dispensing, House of Commons Written Answer, 21 September 2021

Banks, House of Commons Written Answer, 6 September 2021

Cash Dispensing, House of Commons Written Answer, 6 September 2021

High street banks respond to Treasury Committee on branch closures, House of Commons Treasury Select Committee, 20 August 2021

The production and distribution of cash, National Audit Office, 18 September 2020

Access to Banking Standard summary report published by the LSB, Lending Standards Board, 29 July 2021

FCA and Payment Systems Regulator publish updated evidence on cash access, Financial Conduct Authority, 23 July 2021

BBC4 InTouch radio programme, 5 October 2021

Cashless Economies Raise Ethical Concerns About Inclusion, Fair Observer, 4 October 2021

Post Offices record highest amount of business cash deposits all year, Post Office, 14 September 2021

The war on cash – is forcing ‘no cash’ shopping even legal?, EU Observer, 13 September 2021

Trials of shared banking hubs to be extended, BBC News, 18 August 2021

Banking industry takes further steps to protect access to cash, UK Finance, 17 August 2021

Banks face fines for shutting branches: Watchdog ‘is eyeing new rules’ to stop high street closures so customers can still access cash, Daily Mail website, 11 August 2021

Community Request ATMs dispense over £50m to support local communities, businesses and high streets, LINK, 28 June 2021

Cash access as vital as running water, says Age UK, BBC News, 25 June 2021

UK Finance 2021 Payments Market Report – Contactless and Mobile on top, Payments Cards and Mobile, 16 June 2021

Sweden leads way to a cashless future, The Times, 6 June 2021

We can’t afford to let cash die a death, The Times, 26 May 2021

Gender, personal finances and Covid-19, Financial Conduct Authority, 24 May 2021

The future of cash: seven things we learned from the Which? Cash Summit, Which? 14 May 2021

Banking industry commits to supporting customers who depend on cash, UK Finance, 13 May 2021

John Glen addresses Which? Cash Summit, HMT, 13 May 2021

Community Access to Cash Pilots go live with Post Office banking hubs open for business, Community Access to Cash Pilots, 28 April 2021

Bank closures in North Ayrshire: Government observations on petition, House of Commons, 14 April 2021

ATM withdrawals drop by £37bn during year of Covid, BBC News, 17 March 2021

Ethnicity, personal finances and Coronavirus, Financial Conduct Authority, 22 February 2021

Financial Lives 2020 survey: the impact of coronavirus, Financial Conduct Authority, February 2021 [see chapter 5 in particular]

Cash in the time of Covid, Bank of England Quarterly, 24 November 2020

Access to Cash, European Central Bank, 12 November 2020

Where to withdraw: mapping access to cash across the UK, University of Bristol, November 2020

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